New Data Highlights Practices to Retain Talented Leaders

Author: Victoria Kelleher, Brightmine Lead Survey Specialist

Date: April 30, 2024

Leaders propel an organization toward its mission. Beyond the effects of their decisions, their priorities, strengths, and weaknesses have profound implications for the employee experience at every level. Because of this, putting together an effective leadership team can make or break a company's success.

Companies can either hire external talent or develop employees into leaders internally. There are various benefits to developing leaders internally, including:

• Lower costs for recruitment and onboarding;
• Deeper insight into a candidate's skillset and work ethic;
• More control over the priorities instilled during a leader's development, and;
• The ability to engage and retain existing talent.

However, some companies find it difficult to detect potential leaders in their ranks. According to a recent Brightmine survey, more than a third of organizations are not very effective at identifying employees that have leadership potential. This lack of effectiveness has consequences, associated with a worsening trajectory in business outcomes like employee engagement, key talent turnover, and net promoter score (NPS).

Training Managers to Support Career Growth

Managers are the closest point of contact for their direct reports. They are best positioned to recognize top talent inside the workforce. However, not every company is effective at using this vantage point to feed into a leadership development strategy.

Nearly half of employees say they do not have adequate career support from their managers - and, alarmingly, a quarter of them say that this lack of support will probably be a driver for them to quit within six months. The ramifications of this can be particularly strong for high-potential employees, since:

• They are often eager for advancement;
• They are likely to become bored or frustrated if their job responsibilities do not evolve at a rate that challenges them, and;
• They are likely to have an easier time finding new job opportunities.

According to the Brightmine survey, most organizations that are highly effective at identifying leadership potential actively train their managers to do so. This practice is increasingly rare at organizations that are less effective. Companies that administer this training are more likely to report improvement in some key business outcomes.

Chart 1: Does the company train managers to recognize leader potential?

What Managers Must Be Trained to Understand

To support and elevate high-potential employees, managers must be well-equipped to recognize them and actively guide their development. When a company trains managers to develop these abilities, it should focus on pointing out what to look for and challenging misconceptions.

Although employees with leadership potential often work hard to exceed performance expectations, high potential and high performance are not the same. Employees with high potential may appear to be underperforming if their current jobs are a poor fit for their personalities or if they become frustrated by obstacles to advancement.

Moreover, employees that show consistent high performance in a role do not always possess the qualities that are necessary to excel at leadership. These employees might be performing so well because they are exceptionally well-suited to the role they are in. The responsibilities of a leader might be less aligned with their strengths, leading to more difficulty meeting expectations and lower job satisfaction.

High potential and high performance often overlap, but it is important for managers to understand that the degree of an employee's leadership potential will only be revealed when they are challenged with tasks that require the use of leadership skills. Otherwise, they may overlook the employees that have high potential and attempt to advance employees that are best suited to their current positions.

There are a range of qualities leaders need to succeed. When managers are on the lookout for these qualities as the main indicator of potential, they are less likely to overlook high potential or confuse high performance with high potential.

However, each person has a different profile of strengths and weaknesses. A leadership development program should help individuals with natural leadership skills identify and improve upon their shortcomings.

Chart 2: Most Common Leadership Weaknesses

Not every leadership quality is of equal importance. A deficit in some qualities might be tolerable, while other weaknesses can have deeper consequences. The Brightmine survey identified some leadership weaknesses that are associated with measurably worse outcomes. The strongest decline in outcomes was seen in companies whose leaders need improvement in the areas of:

• Integrity/ethics;
• Emotional intelligence;
• Conflict resolution, and;
• Innovation/creativity.

Some of these weaknesses can be improved through targeted interventions. However, businesses can avoid the impact these flaws have on business outcomes entirely if managers are trained to prioritize finding high-potential employees who do not need improvement in these areas.  

Takeaway

Educating managers about how to distinguish high-potential employees can provide a strong foundation for a leadership development strategy. It will ensure that managers are able to distinguish high potential from high performance, so that they can champion the employees who have the highest potential to succeed.

For more information on the most important steps to develop leaders, see the new Leadership Development survey from Brightmine.